CMF Newslinks Archive

“Anecdotes about regulators watching CRE growth with a careful eye have emerged. These market factors are important for banks to monitor, as regulators advise banks to avoid carrying more than 300 percent of risk-based capital in CRE.”–Trepp Senior Managing Director Manus Clancy.

“The competitive market conditions faced by U.S. hotels in 2016 have been well documented. Clearly, U.S. hotel operators saw the threat of stagnant or declining occupancy and slow average daily room rate growth and reacted by controlling expenses.”–CBRE Hotels Senior Managing Director R. Mark Woodworth.

“Commercial real estate borrowing and lending started 2017 on much the same footing it ended 2016. Multifamily properties remain the key force behind overall originations trends and the GSEs continue to drive multifamily originations. Matching broader investment themes, financing backed by industrial properties also picked up while retail declined.”–MBA Vice President of Commercial Real Estate Research Jamie Woodwell

“While greater job and income growth will be positive for U.S. real estate markets, forecasters were reluctant to upgrade real estate fundamentals or returns. New supply in the pipeline along with higher interest rates are likely keeping real estate economists cautious, but more likely realistic as uncertainty about future growth remains a concern.”–William Maher, Director of North American Strategy and Research with LaSalle Investment Management, Chicago.

“MBA believes the original congressional intent was appropriate and should be incorporated into law so the Low Income Housing Tax Credit allocating agencies, individually or in partnership with other Housing Finance Agencys, do not provide both the tax credits and debt financing on the same multifamily affordable rental property transaction. Similarly, should there be a workforce housing tax credit program (a.k.a. middle-income housing tax credit) for multifamily rental properties approved by Congress, we urge that distribution of such credits include a prohibition against a HFA providing both tax credits and debt financing on the same property.”–MBA Senior Vice President of Legislative and Political Affairs Bill Killmer, in a letter to Senate Banking Committee leadership.

“We believe some aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act and other statutes have made the mortgage market safer; however, in many other respects the Dodd-Frank rules have reduced the availability and affordability of mortgage credit for many American families. While we believe some of these new regulations were needed, the pendulum has swung too far and certain aspects of the current regulatory regime warrant review and adjustment.” –MBA President and CEO David Stevens, CMB, in a letter to Treasury Secretary Steven Mnuchin.

“The High-Volatility Commercial Real Estate rules are disproportionally affecting acquisition, development [and] construction lending by driving up borrowing costs and reducing credit availability. The rules also appear to be contributing to the slowdown in bank commercial real estate lending.”–A joint trade association letter signed by the Mortgage Bankers Association supporting proposed House legislation that would clarify HVCRE provisions under the Basel III rule.

“Because debt is ‘stickier’ and outstanding loan balances don’t automatically adjust to changes in prices, mortgage debt outstanding remained stable. In the years since, prices bounced back and now exceed their pre-recession levels, while mortgage debt outstanding–which hadn’t declined–rose at a much slower pace. The ratio between the two is now back to where it was before the recession.”–MBA Vice President of Commercial Real Estate Research Jamie Woodwell.

“While pricing in other commercial real estate segments has stagnated due to economic uncertainty and shifts in consumer behavior, so far investors remain very active in [the multifamily] segment.”–Ten-X Chief Economist Peter Muoio.

“Based on staggering exit pricing of some major creative office projects around the country, this type of value-add strategy–on this large scale–is now being considered by many local, regional and national developers, either via direct investment or joint-venture partnerships with equity partners.”–Michael Soto, Research Director with Transwestern.